Platforms: Overused Buzzword? Or Key to the Future?

When Steve Jobs announced the iPhone to the world in 2007, he had a decision to make:

Would Apple follow what every other phone manufacturer is doing and tightly control the software that’s allowed to run on the iPhone? Or would it allow third-party developers to create software for it?

Jobs initially opted to follow everyone else and tightly control the software on the iPhone, but then quickly switched course. In October 2007 Apple announced the App Store, which then officially launched in 2008. This turned the iPhone into a true platform and changed the course of personal computing and connectivity. And the revenue from being the platform was worth over $50 BILLION to Apple in 2019.

Platforms have the potential to transform industries. But the word “platform” is thrown around far too often and too loosely. Platforms have the potential to transform insurance companies, insurance agencies, and the companies that surround their policyholders. But not in the generic way the term is tossed around today. “Platform” means something important to the future of our industry–let’s explore this very important term.

Platforms for Carriers

Very few carriers are thinking about creating platforms yet, but there are some pioneers who are already making significant strides. Mike Pelto is the CTO of Jewelers Mutual Insurance Company, a specialty carrier in Wisconsin that has built a platform to support an ecosystem for the jewelry industry. He is applying his background in retail to advance insurance. Their platform connects jewelers, policyholders, independent agencies, and an array of jewelry-related services like claims, warranties, and shipping.

When asked about what a platform means to him, Pelto responded that “the first word that comes to mind is ‘ecosystem’. And closely following that is a seamless customer experience.”

The concept of an ecosystem is not new, in fact many consumer technology companies like Apple and Amazon continue to add adjacent products and services that add value to their customers. By surrounding the customer with everything they need, when they need it, platforms encourage customers to stay within the platform’s customer experience.

Platform for Policyholders

And the focus on customer experience is also a common theme among platform companies–and it’s a focus that both agents and carriers alike can learn from. According to Pelto “the focus has to be on the consumer. Platforms digitize the customer experience and connect the customer into the platform to surround them with useful products and services–but at the same time making it a seamless customer experience. We do this to raise the tide of the jewelry industry.”

Platforms for Agents

To remain relevant and grow in the future, agents should be thinking of ecosystem and customer experience the same way. In much the same way that JM is creating an ecosystem around jewelry, agents need to be thinking about their own platform that connects policyholders, carriers, and other service providers to create a seamless customer experience. The result promises to be improved risk, a far greater customer lifetime value, and an agent that is an indispensable part of the policyholder’s life.

As the insurance world continues to modernize and the players in the insurance supply chain slowly modernize, this is becoming possible. And the agents that are able to stay ahead of this curve will be able to grow faster while offering better customer service than the ones who continue to take a more traditional, constrained approach to their customers.

How Platforms Take Over

Platforms and connectivity have remade industry after industry. Software with the App Store. Hospitality with Airbnb. Travel with Uber. And the list goes on.

Platforms enable new value chains and unlock new opportunities. And while they’re not easy to build right now, the technology is slowly maturing and becoming more accessible. For the pioneers, though, the payoff is worth it. As Pelto states, “You have to acknowledge that you’re investing in something with a long-term payoff. You’re investing in business agility that allows you to navigate across solutions in a connected way. You’re gaining ecosystem agility.”

So while platforms are overused as a buzzword, the promise and opportunity that arise from being at the center of an ecosystem remains: stickiness with the customer and differentiated data about your ecosystem that nobody else can touch. And the ambitious companies that are agile enough to move quickly on this opportunity will be the leaders of the next generation.


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